Impacts of Saudi and Emirati deposit of $6 billion into Pakistani reserves
The deposits from Saudi Arabia and Emarati leadership have enhanced Pakistan’s liquidity and monetary reserves of foreign currency.
The amount has improved the country’s capacity to pay for imports and conveniently pay off upcoming external debt installments in the current fiscal year.
Role of Saudi Arabia:
The Saudi kingdom has financed $3 billion to Pakistan’s foreign currency reserves. It has also agreed to establish a credit line worth $3 billion for the sale of petroleum products.
Assistance from the United Arab Emirates:
Eight development projects in Pakistan have been financed by the Abu Dhabi Fund for Development. The total value of the project is AED1.5 billion
Also, it funded AED931 million in grants and that covered projects in sectors such as energy, health, education, and roads.
As the imports swell, Pakistan is facing a balance-of-payment crisis. Pakistan has been looking to fill a gap of at least $12 billion and is also assigning a bailout package with the International Monetary Fund.
Financial stability in Pakistan attracts the British firms
British Airways have returned to Pakistan and it is surely the beginning of strengthening economic ties between the two countries.
The new Islamabad airport and improvement in the security situations attracted British Airways back to Pakistan after the gap of a decade.
UK based companies are interested to invest in Pakistan:
After the improvement in the security situation, many other UK-based firms are considering entering ‘Naya Pakistan’.
Many other companies are interested to boost bilateral ties with Pakistan. UK-based firms are considering entering different sectors of Pakistan’s economy including:
- Banking and Finance
- Retail and services
Major UK businesses in Pakistan:
Presently, around 120 British firms are operating and investing in Pakistan. Major UK businesses succeeding in Pakistan include:
- Mott MacDonald infrastructure development (played an important role in the development of the new Islamabad airport)
- Unilever and Reckitt Benckiser (consumer goods sector)
- Standard Chartered and UBL (in banking)
- GlaxoSmithKline (in pharmaceuticals)
- Shell (in oil and gas)
- UK brands (Debenhams, Toni, and Guy, Monsoon and Accessorize)
Key sectors for UK businesses in Pakistan:
Key sectors for UK businesses in Pakistan include:
- Professional services
- Energy and Infrastructure
- Defense and Security
- Retail and Consumer goods
Growing Trade Ties:
The UK-Pakistan trade ties are gradually-growing every year and are expected to continue in upcoming years.
The bilateral trade between Pakistan and UK stood at £2.9 billion in 2017. By the year 2020, the ties will be increased to £3.5 billion.
GSP Plus State:
Under the GSP Plus status, Pakistan will continue to export a number of products to the UK market at concessionary duties.
China Pakistan Economic Corridor:
The British deputy high commissioner claimed that the ChinaPakistan Economic Corridor (CPEC) remains a huge opportunity for Pakistan’s economy.
Under its global Belt and Road Initiative (BRI), China is investing around $50 billion in Pakistan’s infrastructure, she said.
UK is keen to play a vital role in CPEC:
She added that UK is also keen to play its exclusive role in CPEC projects because they offer a huge business opportunity for its businesses as well.
“We are also keen to participate in CPEC. The UK has remained a long-term investor in Pakistan and it sees a stable, prosperous and democratic Pakistan by 2030,” she said.
Words from British Deputy High Commissioner and Trade Director for Pakistan:
While talking to media a few days back, the British Deputy High Commissioner and Trade Director for Pakistan Elin Burns said:
“Pakistan is an essential destination and we cannot ignore it”
The UK is committed to supporting Pakistan to trade its way out of poverty. It is important that Pakistan continues to progress on international obligations in order to retain its EU GSP Plus status, she said.
After China, UK remained a leading foreign direct investor in Pakistan, she said. However, she urged the government to improve the regulatory framework.
Source: Express Tribune